Dayton approved the grant despite the project's recent low marks offered by the Minnesota Department of Employment and Economic Development (DEED). The $2 million grant was part of a larger $47.5 million distributed for various projects.

The amount was less than hoped for by light rail supporters, and is generally seen as an interim funding move, generating mixed response from rail supporters.

"We're pleased that Southwest Light Rail received funding as part of the state's new economic development grant program and we thank Governor Dayton for his leadership," Minneapolis Regional Chamber of Commerce President Todd Klingel said in an emailed statement to local media.

State Rep. Steve Simon said in a release that the grant should allow the legislature to leverage more federal dollars for the project. "I'm an optimist about all this," he said. "We're in the hunt, we're in the race ... That's good news."

The 14-mile, 17-station Southwest Light Rail line is projected to cost at least $1.25 billion, with daily ridership of 30,000 by 2030. It would connect near Target Field in Minneapolis with the Hiawatha (Blue Line) and Central Corridor (Green Line) LRT routes, as well as with Northstar commuter rail line.